Animal Feed Market in Saudi Arabia is Facing Challenges

22 Dec 2010 • by Natalie Aster

LONDON – Saudi Arabia, an importer of animal feed and feedstock, needs to import 500,000 tones of animal feed to satisfy the demand on animal feed market in Saudi Arabia. It’s much cheaper for Saudi to import water-intensive crops rather than growing them locally. So Saudi Arabia is looking at getting it from Europe, U.S. and Canada since it is impossible to grow the fodder in Saudi because of water shortages. In order to overcome the problem of shrinking water resources and global food shortages, the government decided to develop few ways of facing the challenges.

The Agricultural Initiative by the government took effect in January 2009. Backed by a SR3 billion government-sponsored investment fund, the initiative aims to improve long term food security by enabling private Saudi businesses to invest in agricultural projects in countries better suited for crop cultivation, including Ethiopia, Turkey, Vietnam, Egypt, Kazakhstan, Ukraine and Sudan. The Rashied Al Balllaa Establishments in Saudi Arabia is a successful Muyang overseas turnkey project which includes a multi-purpose feed mill complex that will help to cover some of the demand of animal feed market in Saudi Arabia.

The fact that the Saudi Arabian government announced a decision to decrease import subsidies on barley, feed corn (maize) and other animal feed ingredients in response to declining world grain and feed prices worsens the situation. According to the new decree, the import subsidy on barley was reduced from $320 to $200 per tone. So now, animal feed companies in Saudi Arabia are willing to spend up to $200 million in order to secure fodder supplies this year.

Also government initiative was unveiled to reduce wheat production by 12.5% per year until halting it completely by 2016. That will definitely affect some of the main animal feed producers in Saudi Arabia: Grain Silos and Flour Mills Org, ARASCO Head Office, Rashed Establishment for Trading and Agriculture, Saudi Arabian Feed Company, United Feed Co., Arabian Integral Ministration Company.